Landlord has to pay tenant $10K

A NEW Zealand landlord has been forced to sell his rental property in order to pay back a former tenant nearly $10,000 due to a legal technicality.

Dunedin resident Vic Inglis told the Otago Daily Times he and his wife were feeling "pretty dark and twisted" over the saga, which started with a bizarre ruling by the Tenancy Tribunal in April.

Former tenant Natalie Parry rented the Luke Street two-storey house from the couple between July 30 last year and February 21 this year, but the Tribunal found that because unpermitted alterations had been made to the downstairs area - before the couple purchased the house - the tenancy was unlawful.

That meant Ms Parry was entitled to a full refund of the $NZ10,960 ($9900) rent, and a counterclaim by the couple for $NZ3519 ($3181) in compensation and damages was dismissed.

"It's been the darkest six months for a long time," Mr Inglis told the paper. "It's been a nightmare. We have managed to sell the property so we can pay her back. But should we have to? No."

The alterations made by the previous owner deviated from the plans submitted to the Dunedin City Council before the build. Mr Inglis said he first heard about the plans when Ms Parry presented them to him and told him she intended to take him to the Tribunal.

Despite a certificate of acceptance being issued at the end of March after Mr Inglis learned of the issue, the Tribunal was unmoved. "I didn't think she had much of a case," he told the paper. "The tribunal agreed with her that because part of the property wasn't permitted it was untenantable."

To add insult to injury, Mr Inglis claimed his former tenant had sublet the downstairs area during her tenancy for profit. "It was leased to her and her son for cheap rent on the premise it was just for them," he said. "We got word ... she was effectively using it like a boarding house."